Global Risk Indexes (23-02-2025)

Global 99 (0 —)
MENA 99 ( —)
APAC 98 ( —)
Europe 99 ( —)
Africa 98 ( —)
AMERs 98 ( —)
Markets 99 ( —)
Markus Schmidt, Europe region analyst at Worldwise Analytica

Markus Schmidt

Analyzing Today, Anticipating Tomorrow

Europe's Strategic Future in Peril: U.S.-Russia Negotiations Marginalize EU, Economic and Security Crises Escalate

The United States and Russia are negotiating Europe's security architecture'without European input. The latest developments in Riyadh and Switzerland indicate that Washington and Moscow are moving toward a settlement that may involve Russian territorial control over occupied Ukrainian regions. Trump's decision to refuse co-sponsorship of a U.N. resolution affirming Ukraine's sovereignty has sent shockwaves through European capitals, as it signals a fundamental shift in U.S. policy. European leaders now fear a deal that not only weakens Ukraine but also undermines NATO's credibility, allowing Russia to reassert influence in Eastern Europe. If such an agreement is finalized, it could mark the biggest geopolitical setback for Europe since the Cold War.

Germany's political and economic crisis is deepening, threatening EU stability. With just days until the elections, the far-right Alternative for Germany (AfD) continues to rise in polls amid growing concerns over foreign influence in German politics. Reports of Austrian intermediaries funneling illicit funds to the AfD raise fears that Russia is attempting to shape the election outcome. At the same time, Germany's economic woes are worsening, with industrial output contracting and the threat of a prolonged recession looming. If Germany, the EU's largest economy, enters a deeper downturn, it could weaken the bloc's economic resilience and political cohesion at a critical time.

The U.S.-EU trade war is escalating into an economic crisis for Europe. Trump's decision to impose higher tariffs on European cars and agricultural products has forced the EU into a difficult position'either retaliate and risk deepening the recession or attempt diplomatic de-escalation at the cost of appearing weak. European industries, especially the automotive and agricultural sectors, are already suffering from declining exports, and investor confidence is falling sharply. If no resolution is found soon, the economic fallout could trigger political instability across key European economies.

Russia's hybrid warfare against Europe has entered a more aggressive phase. Cyberattacks on Italy's financial sector, disinformation campaigns in Germany, sabotage of undersea energy cables, and suspected Russian-backed espionage in Poland all point to a coordinated effort to destabilize the continent. The European Commission has announced a billion-euro initiative to enhance cybersecurity and protect infrastructure, but these measures remain largely reactive. If Russia continues to escalate its hybrid operations, European governments may have to adopt more direct countermeasures, including economic sanctions and intelligence operations.

Ukraine's energy crisis is worsening as Russian attacks on critical infrastructure intensify. Missile and drone strikes have crippled Ukrainian gas production and left hundreds of thousands without power. With winter still ongoing, the humanitarian and economic consequences are becoming severe. Europe has stepped up emergency energy assistance, but long-term solutions, such as securing alternative energy supplies, remain slow to materialize.

NATO is at a strategic crossroads over whether to deploy a peacekeeping force to Ukraine. The idea of European forces operating in Ukraine, independent of U.S. leadership, was unthinkable a year ago. Now, with Washington shifting its priorities, European policymakers are debating whether a limited NATO force could act as a deterrent against further Russian advances. However, the risks are immense'if Russia ignores a peacekeeping presence, NATO could be forced into direct military engagement. Without U.S. backing, such a move could expose European forces to significant operational and political vulnerabilities.

The Greenland independence debate is emerging as a new geopolitical flashpoint. With the ruling Inuit Ataqatigiit party facing pressure to accelerate the process, Europe is closely watching whether a shift in Greenland's status could disrupt NATO's Arctic strategy. The U.S. has increased its military presence in the region, raising concerns that the Arctic could become a contested space between NATO and Russia.

Europe is at a breaking point, facing diplomatic isolation, economic instability, and security threats on multiple fronts. The choices made in the next few weeks will determine whether the continent can assert its strategic autonomy or continue to be shaped by the decisions of external powers.

Geopolitical Risk Assessment for the Europe
(23-02-2025)

Europe is experiencing its most severe geopolitical crisis in decades, as U.S.-Russia negotiations over Ukraine are advancing without European involvement, raising fears of a settlement that weakens NATO and cements Russian territorial gains. The U.S.-EU trade war has escalated into an economic conflict that risks destabilizing the Eurozone, while Germany's economic decline and political volatility are further exacerbating EU fragmentation. Security concerns have intensified due to Russian hybrid warfare operations, cyberattacks, energy infrastructure sabotage, and suspected political interference in Germany's upcoming elections. NATO's debate over a potential peacekeeping presence in Ukraine, the EU's struggle to formulate a unified strategic response, and growing pressure on European economies all underscore a moment of profound uncertainty. If Europe fails to assert its strategic autonomy in the coming weeks, it risks being sidelined as global powers reshape the security landscape without its input.

Geopolitical Risk Index

Developments to Follow for the Europe (See All Global)

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